Ideavillage Products Corp. v. Bling Boutique Store
1:16-cv-09039
| S.D.N.Y. | Apr 21, 2017Background
- Plaintiff Ideavillage Products Corp. owns the Copper Fit trademark and related packaging/marketing copyrights and sells primarily online and via television.
- Plaintiff sued multiple defendants (Bling Boutique Store, et al.) alleging sale of counterfeit Copper Fit products and asserted Lanham Act, Copyright Act, and New York state claims.
- Court entered a preliminary injunction (PI) including an asset freeze after an Order to Show Cause; defendants initially defaulted, then the default was vacated.
- Defendants moved to dismiss on forum non conveniens grounds (seeking transfer to District of New Jersey) and separately moved to release the frozen funds and modify/vacate the PI.
- The PI was based on plaintiff's evidence of counterfeiting; defendants failed to appear at the PI hearing, to produce requested discovery about identity/sales, and submitted only unsupported denials.
- Court denied both the motion to dismiss and the motion to release frozen funds, finding no significant change in facts or law, that plaintiff showed likelihood of success and irreparable harm, and that the court had authority to freeze assets (including foreign accounts).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether case should be dismissed for forum non conveniens or transferred under §1404(a) | Plaintiff selected S.D.N.Y.; significant operative facts occurred there; deference to forum choice | Case should be heard in District of New Jersey (Plaintiff incorporated in NJ) | Denied; plaintiff's forum choice and convenience factors favor S.D.N.Y.; transfer not warranted |
| Whether the PI (including asset freeze) should be vacated or modified | PI was necessary to prevent irreparable harm from counterfeit sales; plaintiff likely to succeed | Defendants argue PI was wrong, based on nationality, delay, and lack of evidence | Denied; defendants offered no new facts or controlling law; plaintiff showed irreparable harm and likelihood of success |
| Whether the court may freeze assets located abroad | Plaintiff asserts freeze is proper to preserve proceeds of counterfeiting | Defendants contend foreign banks are beyond court's reach | Denied relief; court has authority to freeze foreign assets where it has personal jurisdiction over defendants |
| Whether bond is inadequate and should be increased | Plaintiff posted $5,000 as ordered; adequate given no proven damages | Defendants say bond is too low and seek increase | Denied; defendants failed to quantify harm or propose a rational bond amount |
Key Cases Cited
- Am. Dredging Co. v. Miller, 510 U.S. 443 (discusses doctrine of forum non conveniens and federal court discretion)
- Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422 (forum non conveniens has continuing application only when alternative forum is abroad)
- D.H. Blair & Co. v. Gottdiener, 462 F.3d 95 (2d Cir.) (factors for convenience transfer under §1404(a))
- Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (standard for preliminary injunction requires likelihood of irreparable harm and likelihood of success)
- Zino Davidoff SA v. CVS Corp., 571 F.3d 238 (2d Cir.) (alternative standard for preliminary injunction in trademark cases)
- Gucci Am. v. Duty Free Apparel, Ltd., 286 F. Supp. 2d 284 (S.D.N.Y.) (counterfeits by their nature cause confusion)
- Romag Fasteners, Inc. v. Fossil, Inc., 979 F. Supp. 2d 264 (D. Conn.) (shifted burden in counterfeiting cases; use of counterfeits equates to intent to confuse)
- Gucci Am. v. Bank of China, 768 F.3d 122 (2d Cir.) (district court may freeze assets tied to defendants where personal jurisdiction exists)
- United States v. First Nat’l City Bank, 379 U.S. 378 (authority to restrain property before trial where jurisdiction exists)